Binance, the world’s largest crypto exchange, announced on Monday that it will pause all deposits and withdrawals in USD from bank accounts starting February 8. The company clarified that the pause would only affect a small portion of its user base, and that all other methods of buying and selling crypto from the exchange will remain effective. The suspension does not affect Binance.US clients, as the company is the only firm between the two with permission to serve users within the United States.
The collapse of FTX, once Binance’s largest international rival, has made banks hesitant to form partnerships with crypto firms, after federal regulators issued warnings against such partnerships. Binance CEO Changpeng Zhao commented that the pause on USD bank transfers is still a “bad user experience,” despite its minimal impact on customers.
In January, Binance announced that one of its banking partners, Signature Bank, would stop processing fiat to crypto transactions worth less than $100,000. The lender intends to decrease its exposure to crypto markets, cutting off as much as $10 billion in deposits from crypto clients. This move was in response to a statement from the Federal Deposit Insurance Corporation that crypto-sector banking should be considered a high-risk activity.
The suspension of USD bank transfers from Binance is a sign of the uncertain regulatory environment that crypto firms are currently facing. Banks are increasingly hesitant to form partnerships with crypto firms due to warnings from federal regulators, and Binance has had to suspend USD bank transfers in order to protect its customers. Despite the inconvenience, Binance is still committed to providing its users with a secure and reliable platform for buying and selling crypto.